'Only two bids for Lloyds branches'

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The Independent Online

Lloyds Banking Group has received only two bids for the 632 branches it has put up for sale, which could force it to demerge them instead, it was reported today.

Only NBNK and Co-operative Financial Services made formal offers ahead of the deadline, which has prompted Lloyds' advisers to consider a possible float of the branches as separate business, the Sunday Telegraph said.



This could involve handing shareholders an equity stake in the 632 outlets - which largely consists of the TSB and Cheltenham and Gloucester brands - and splitting them off from the rest of the bank.



Lloyds is being forced to divest the branches by the European Union in return for the £20 billion in state aid it received following the 2008 credit crisis.



New chief executive Antonio Horta-Osorio last month pledged to speed up the sale in a move to make his mark on the bank as part of a strategic review that included 15,000 job cuts by 2014 and plans to revitalise the Halifax brand.



Virgin Money, which previously had expressed an interest in both Lloyds and Northern Rock, which the Government is looking to sell, is said to have asked for more details.



Another potential bidder, National Australia Bank has also reserved its position ahead of a possible offer later.



Lloyds had hoped to generate up to £4 billion from a sale and because of that is said still to prefer a disposal, especially as a demerger could be complicated as the Government would end up with a 41% stake in any spin-off to match its current stake in the bank.



Another option said to be under consideration is to postpone the sale. The bank has a deadline of November 2013 to finalise a deal.



Lloyds Banking Group has 104,000 full-time staff worldwide. In the UK, it has main offices in London, Cardiff, Edinburgh and Belfast among others.



PA

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